Tuesday, July 24, 2012

I called it....Parts Unlimited Withdraws From Dealer Expo

Motorcycle Product News is reporting that the largest company in the Powersports Industry, the 900 pound Gorilla of the parts companies PU is withdrawing from the Dealer Expo.

For all its worth Parts Unlimited and Fred Fox maintain a line in the sand which leads to some standards in the industry. Its not about being good or bad, it's that they set the membership standard like BJ's, Costco, and Sam's. They require dealers to have a storefronts and not work from their garage at home which is one reason many Chinese only dealers and at home shippers aren't PU dealers. 

Few companies have standards or buy ins except for the big guys like Tucker, PU, and mainstream brands like Honda, Vespa, Yamaha. You dont see that in many of the exhibitors anymore at Dealer Expo because if you're next to the price point company you start acting like one to get the sale. That's not them and I applaud their decision.

It has become common knowledge that this year some smaller scooter brands were so desperate  they were setting up dealers less than 5 miles from each other just to score some sales. Illegal in most states you still saw reps trying to push this on dealers because of the lack of qualified buyers. Nobody will tell you this at the show, but buy some guys a few beers and the truth comes out.

After the show this year I got a flood of emails " hey can you help me with some leads and emails because my boss wants to know if the show was worth it and I didnt get sufficient business cards." It wasnt for a lack of trying it was because there weren't that many people there and there weren't good leads.

The sad truth is that every year at the Dealer Expo we get more and more guys that are members of clubs, have a lawnmower shop, or just aren't a Powersports Dealer. So they go down the chain of distributors from Parts, to Tucker, to the next guy until they find the ones without any requirements and standards making the whole show unprofitable. Then everyone thinks that you can be a dealer without having a storefront, insurance, employees, overhead. You don't fly to Indianapolis to meet with people who collect disability and sell parts from their basement at cost and I've been saying this for years, you dress up, you put on your game face and you want to meet with serious players not tire kickers. Dealer Expo has become Tire Kicker Expo the last 5 years. Raise the standards a bit so you dont end up like Woolworths faded out by shinny new Target store down the street.

I like to push for sales. I believe you can't sell what you don't have. So I dont go to a small shop that has no inventory, I drive to Best Buy where I can find everything I need in one place. This is the truth about the industry. Parts Unlimited has a lot of stuff, more than anyone. If they are not there half the store is now empty.

The same is true for the scooter industry. You can't have reputable brands standing side by side to Chinese suppliers whose only goal is to bypass distributors and sell direct to the public and small shops. They have no concept of branding, something called product liability insurance or even business insurance. Neither do the drop shippers and home scooter repair guys who present themselves as legitimate players "I sell at cost to help people" "I run this as a hobby" "Im huge on the chat rooms." In the end you further dilute the industry. You want stores even if there are fewer that will stock and give a high level of service.

It is no surprise that PU has been loosing money on the show for years. Why bother when you can have your own show where dealers will go and spend $5,000 and not be shopping at the smaller distributor locations. Makes sense.

It also makes sense to ask that Dealer Expo raise its standards, reinvents itself, and helps lift the industry not further drag it down with the idea that the customer gets anything they want. Yes, we know many of the customers want the lowest price, we know many of them want China direct, ok let them do it on their own time. At the show have some standards of what is a Dealer. It is called Dealer Expo after all.

Its also a reminder that Dealer Expo dropped its standards years ago and by catering to the Asian manufacturers and Pawn shops it erased what little return on investment the show had.

The truth is Dealer Expo needs to change with the times and update its culture.

The show would also do much better in a city like Las Vegas or Orlando, but dont tell that to Advanstar they really think the Midwest is where the money is in the industry right now. You need to be closer to the south and west coast where the year round dealer are. Where people are still buying scooters and motorcycles that time of year. It will be interesting to see if Tucker Rocky who just had their dealer meeting in Dallas Texas will continue with the show given the news.


Just weeks before the annual National Vendor Presentation in Madison, Wis., Parts Unlimited/Drag Specialties has announced plans to withdraw from the 2013 Dealer Expo to focus on launching two new regional dealer showcases in 2013.
“We will not be displaying at the 2013 Indianapolis Trade Show,” says Lemans VP of sales Greg Blackwell. “We feel that we can no longer justify the cost to participate.”
The distributor will produce a West Coast Regional Showcase on March 23-24, 2013 in Anaheim, Calif., and a Northeast Regional Showcase on April 6-7, 2013 in Valley Forge, Penn.
“Our plan is to produce a Reno Style Showcase where we will feature over 200 vendor booths in each of these shows,” says Blackwell. “We will host a Saturday afternoon Rep/Dealer preview, a Saturday evening Meet & Greet and a Sunday Showcase.”
Stay tuned to MPN for more news on these new regional showcase events and for coverage of the annual NVP in August.

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